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Press Releases
Center Bank, Los Angeles, California, Assumes All Of The Deposits Of Innovative Bank, Oakland, California

FOR IMMEDIATE RELEASE
April 16, 2010
Media Contact:
LaJuan Williams-Young
(202) 898-3876
Email: lwilliams-young@fdic.gov

Innovative Bank, Oakland, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Center Bank, Los Angeles, California, to assume all of the deposits of Innovative Bank.

The four branches of Innovative Bank will reopen during normal business hours beginning Saturday as branches of Center Bank. Depositors of Innovative Bank will automatically become depositors of Center Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their former Innovative Bank branch until they receive notice from Center Bank that it has completed systems changes to allow other Center Bank. branches to process their accounts as well.

This evening and over the weekend, depositors of Innovative Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, Innovative Bank had approximately $268.9 million in total assets and $225.2 million in total deposits. Center Bank paid the FDIC a premium of 0.5 percent to assume all of the deposits of Innovative Bank. In addition to assuming all of the deposits, Center Bank agreed to purchase essentially all of the failed bank's assets.

The FDIC and Center Bank entered into a loss-share transaction on $178.1 million of Innovative Bank's assets. Center Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-430-6165. The phone number will be operational this evening until 9:00 p.m., Pacific Daylight Time (PDT); on Saturday from 9:00 a.m. to 6:00 p.m., PDT; on Sunday from noon to 6:00 p.m. PDT; and thereafter from 8:00 a.m. to 8:00 p.m., PDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/innovative.html.

As part of this transaction, the FDIC will acquire a value appreciation instrument. This instrument serves as additional consideration for the transaction.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $37.8 million. Center Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. Innovative Bank is the 48th FDIC-insured institution to fail in the nation this year, and the 3rd in California. The last FDIC-insured institution closed in the state was La Jolla Bank, FSB, La Jolla, February 19, 2010.